The compound interest for two years at 12% per annum is ₹477. What is the Principal amount(in ₹) invested?
Answer & explanation
Correct answer: option 1
From the formula for compound interest, we know,
C.I = P(1+$\frac{R}{100})^t$– P
477 = P [ 1 + \(\frac{12}{100}\) ]² - P
477 = P [ \(\frac{28}{25}\) × \(\frac{28}{25}\) - 1 ]
477 = P [ \(\frac{ 784}{625}\) - 1 ]
477 = P [ \(\frac{ 159 }{625}\) ]
477 = P [ \(\frac{ 159 }{625}\) ]
P = Rs.1875